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Ethereum (ETH) appears to have finally awakened from its slumber, rising nearly 37% in the past week after Bitcoin (BTC) surged to an all-time high (ATH).
Spot Ethereum ETFs record daily flows
Ethereum, the second-largest cryptocurrency with a market cap of about $404 billion, is now gaining ground on BTC, as the platform’s ETH token has jumped more than 35% over the past week.
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While the broader digital asset market has rebounded with Donald Trump’s victory in the 2024 US presidential election, there may be additional factors also driving the industry’s recent boom, especially for Ethereum.
The key data point is the large inflow of funds into ETH spot ETFs. On November 11, US ETH ETFs attracted a record $295 million in daily inflows, the highest amount to date.
In comparison, the previous peak of daily inflows into ETH ETFs was $106 million. registered The first day these ETFs were launched was July 2024.
According to data from SoSoValue, the record inflows were led by Fidelity’s FETH ETF, which attracted $115.48 million.
It was followed by BlackRock’s ETHA with $101.11 million, Grayscale’s ETH with $63.32 million, and Bitwise’s ETHW with $15.57 million.
At the time of writing, the total value of net assets held across various ETH spot ETFs is $9.72 billion, representing just over 2.41% of Ethereum’s total market capitalization. Meanwhile, the cumulative net outflows from all ETH ETFs reach $41.30 million.
ETH price action and recovery in DeFi
Renewed interest from institutional investors in Ethereum ETFs amid record daily inflows appears to be contributing positively to Ethereum’s price movement.
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Throughout most of 2024, ETH lagged in price performance among major cryptocurrencies such as BTC and Solana (SOL). However, Q4 2024 holds the potential for a major shift in ETH’s momentum.
analysis Leon Weidmann, head of research at the Onchain Foundation, notes that ETH signature levels are at ATH, while token reserves on cryptocurrency exchanges are trending toward record lows.
This combination of record high hedging levels and low supply on exchanges indicates a potential supply squeeze, which could lead to a parabolic rally in ETH.
Additionally, the ETH/BTC ratio appears to be as well He recovers After long losses, the trading pair rose from 0.034 to 0.040 before falling to 0.037 at the time of writing the analysis.
The next major resistance for this pair is around 0.040, and a successful breakout from this level could lead to further gains for ETH over BTC. At press time, ETH is about 32% below the $4,878 ATH value recorded in November 2021.
Moreover, Ethereum’s decentralized finance (DeFi) activity appears to be the same to choose steam. Data The DefiLlama report shows that the total value locked (TVL) across Ethereum-based DeFi protocols currently stands at $62.36 billion, up from around $24 billion in November 2023.
More than half of this TVL is tied to Ethereum’s Lido platform, which holds nearly $33 billion. Lido is followed by DeFi lending protocol Aave with $15.21 billion and EigenLayer with $14.57 billion.
He said that, Fears It remains in relation to ETH’s “ultrasonic money” narrative due to the high token issuance rate. At press time, Ethereum is trading at $3,291, up 3.1% over the past 24 hours.
Featured image from Unsplash, charts from X.com, DefiLlama.com, and TradingView.com